Bill Clinton and Steny Hoyer: The “Wall Street Democrats” Fight Back

March 27, 2014

Richard Eskow

If progressive and populist ideas resonate with most voters, some people have asked, why isn’t the Democratic Party doing better in the polls? Here’s one reason: Some of the party’s most prominent leaders are still pushing Wall Street’s unpopular and discredited economic platform.

Recent speeches by former President Bill Clinton and House Minority Whip Steny Hoyer showed that Wall Street continues to hold considerable sway in their party, despite the fact that its austerity agenda has failed. Its “deficits over growth” ideology has wounded both Europe and the United States. To hear Clinton and Hoyer speak, you’d think we’d learned nothing from the economic experience of the last five years.

The Millennial Deficit

What President Clinton says matters. He’s the architect and primary spokesperson for the corporatist and pro-Wall Street wing of his party. He’s also the political and personal partner of the Democratic Party’s presumed 2016 candidate. Enormous sums are being raised for Hillary Clinton’s candidacy even now, which reinforces the Clintons’ enormous influence (and gives them good reason to please the big-money crowd).

Headlines like the AP’s emphasized the “gradual deficit reduction” theme of President Clinton’s talk to the “Clinton Global Initiative University” in Phoenix. The Washington Post reports that President Clinton was given a “glowing introduction” from Michael Peterson. Peterson heads the right-wing, strongly pro-austerity, and staunchly anti-Social Security Peterson Foundation on behalf of his billionaire father Peter G. Peterson. That introduction, we’re told, led to “an extemporaneous riff about deficit issues” (although we wonder how much is truly extemporaneous with this most polished of political performers).

It’s rather stunning: A former president addresses members of a generation that has been saddled with record student debt and which faces the worst job market for graduates in modern history, and he talks, not of jobs or debt or decent wages, but about deficit reduction.

What’s more, this generation’s woes were caused in large part by the Clinton Administration’s eager collaboration with Republicans and Wall Street executives on deregulation. That collaboration also led to the accumulation of enormous wealth by a number of former administration officials. (Mr. Clinton did pretty well himself.)

And people wonder why Gallup reports that millennials are at or near record levels of alienation from both political parties? When leaders of both parties emphasize deficits over jobs, their disaffection becomes easier to understand.

Sleight of Hand

Ever-sensitive to shifting political tides, President Clinton apparently shied away from his past support for Social Security cuts in his “extemporaneous riff.” He complained instead about Republican intransigence over tax increases. He was wise to shy away from the spending cuts he has supported in the past, but the basic message was unchanged: It’s the deficit, stupid.

That’s the wrong message. Clinton’s been trying to misdirect the nation’s attention to government debt for years. He preached the gospel of deficit reduction at Peterson’s 2010 “Fiscal Summit,” repeated the performance at the 2011 “Summit,” and even pushed for the austerity-minded Simpson-Bowles plan during his spellbinding speech at the 2012 Democratic convention.

It’s impossible to look into the soul of another person. But it feels breathtakingly cynical for President Clinton to speak to a student crowd about deficit reduction when they, and the rest of the nation, desperately need government programs for jobs and growth – programs that have been strangled by Washington’s wrongheaded fixation on deficit reduction.

Clinton also railed against “a billionaire spending a fortune to run television ads against you to tell everybody how un-American you are.”

“This is a new thing in American history,” said the former president, “and on a bipartisan basis we need to reject that.”

Nothing was said about billionaires like Pete Peterson spending a fortune convincing Americans to cut Social Security and gut other government programs.

Swagger

As for Hoyer: Austerity-lite advocates have offered a shifting set of rationales for their deficit fixation, using everything from disproven inflation fears to discredited economic spreadsheets. But Hoyer’s come up with a new one: Cutting the deficit, he says, is the best way for “America to get its swagger back.”

The minority whip was addressing the discredited Wall Street front group that calls itself “Third Way.” While he, too, was careful not to mention his support for Social Security cuts, Hoyer expressed disappointment that the Simpson-Bowles plan was never enacted. That’s saying the same thing.

Hoyer also called for a “big and balanced” budget agreement. “Big and balanced” is a euphemism for the kind of deal that hurts the middle class through Social Security and Medicare cuts, but which also includes tax hikes that Republicans have historically opposed. Fortunately for Wall Street, the increases promoted by Peterson funded groups go easy on the millionaire and billionaire crowd.

In fact, Simpson-Bowles and similar proposals actually offer tax decreases for the highest earners, coupled with reductions in “tax expenditures” – a phrase often used to describe tax breaks the middle class relies upon, like the home mortgage interest deduction and the employer health insurance deduction.

For years the deficit crowd has tried to create a false sense of panic about government debt. So it was especially ironic to hear Hoyer say that “it’s at this moment, when we don’t have a crisis breathing down our necks, that we have the best chance to lay the groundwork for the hard decisions we will need to make.” (Emphasis ours.)

The Struggle

There’s a struggle underway over the future of the Democratic Party. The populist movement has scored some significant recent wins, including the electoral victories of Massachusetts Sen. Elizabeth Warren and New York Mayor Bill de Blasio. Its ideas resonate with the public, and are in sync with mainstream economic thought.

But the remarks from Clinton and Hoyer demonstrate that the party’s Wall Street wing is still riding tall in the saddle, despite its discredited ideas and unpopular proposals.

There’s one sure-fire way to give a person, or a country, its “swagger” back: a good job at good wages will do it every time. Too bad these Wall Street Democrats aren’t talking about that.